Don't Fall Down As You Staff Up

An expert on second-stage entrepreneurs, Dino Signore is manager of entrepreneurial education at the Edward Lowe Foundation. Signore leads all foundation learning events for second-stage business owners and executives. A national, nonprofit organization based in Cassopolis, Michigan, the Edward Lowe Foundation supports entrepreneurship through research, recognition, and educational programs.

Manager of Entrepreneurial Education at the Edward Lowe Foundation@LoweFoundation

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We tend to think about "relationships" most often in the contexts of romance and family. But research shows that building strong bonds with your employees is critical to your company’s success. For example, Gallup’s "State of the American Workplace" shows that engaged employees are more productive, innovative, healthier and have fewer accidents. Yet 70 percent of American workers are disengaged. Meanwhile, a report from MSW Research and Dale Carnegie identifies the top driver of employee engagement as a good relationship with his or her direct supervisor, followed by a belief in senior leadership and pride in working for the company,

Some leaders are naturals at building relationships and cultivating trust. Others have no aptitude for it at all. Entrepreneurs who have moved into second stage and are adding staff may find that employee relationships are particularly challenging. Suddenly you find yourself working not only with a handful of trusted people you know well but an entire (and entirely new) social system. Most entrepreneurs stumble at this point, often badly.

Building relationships involves many things, but two of the most important are being adept at the art of inquiry and knowing how to empower employees.

Ask, don’t tell

One of my favorite authors is Edgar Schein, professor emeritus at MIT’s Sloan School of Management. In his 2013 book Humble Inquiry, Schein points out that we live in a culture of "tell," which weakens relationships instead of enhancing them. Telling someone what to do or what to think is a turn-off on multiple levels; for starters, it creates a presumption that the person you're talking to is ignorant.

Instead, be inquisitive. Inquiry is invaluable in a wide range of business situations, from problem-solving and strategic thinking to getting to know your employees better. Inquiry turns any dialogue into a learning opportunity. Indeed, there's an old saying among management pundits that the seven most powerful words a business leader can use are: "I don’t know. What do you think?"

Suppose you're brainstorming with your staff to discuss new market opportunities, or to come up with a new product line. If you're not asking questions, you're sending a silent message that your opinion is the only one that counts.

Asking questions can be difficult for many leaders. When you're top dog it's easy to believe you should have all the answers, and admitting you don't can stir up feelings of incompetency. Get over it. In second stage, you're scaling your company and moving into new territory. There's no way you can possibly be omniscient.

Even when you do know the right answer, questions can serve you well. If an employee comes to you with a problem, instead of rushing in with a readymade solution, ask them about the context of the situation. What triggered the problem? What solutions have they tried so far? Why do they think those solutions haven't worked? What haven't they tried? Questions like these can help employees consider options that might not have occurred to them.

Asking questions allows allows you to learn more about your employees--what motivates them, how they see the world, and how their thinking processes work. This helps you anticipate their reactions to different situations and better leverage their strengths and talents.

Inquiry also humanizes you as a leader. Think about being on a first date. There are usually a lot of questions being batted around. If one person is doing all the talking, the other person is likely to be bored. There needs to be mutual curiosity. It's not all about you.

Some quick tips:

--Don't ask rhetorical questions that you already know the answers to. You're not trying to lead the person to your solution.

--Don't adopt an interrogating manner. If employees feel their answers could spark retaliation, you're not going to get honest answers.

Inquiry only goes so far in building relationships. You can't ask employees for feedback and then dismiss it. Let their input help shape your decisions. Let them know why and how decisions are being made.

Even better, delegate and let them make decisions. You want to maximize the brainpower of your people, and if you're micromanaging them, that's not going to happen.

Delegating isn't easy for second-stage entrepreneurs. You're used to calling all the shots. And lending your authority to someone else can be downright scary. After all, this business is your baby, and the wrong decisions could lead to its demise.

If the mere thought of delegating sends your blood pressure skyrocketing, then ease into it. Try something low risk, especially for employees who are new to the organization. If they do well, give them a bigger assignment. If things don't go well, talk about it. You may have given them the wrong task.

Even when things are going well, keep a feedback loop going. Discuss the assignment, what was done, the employee's decision-making process, and the results. Ask questions and listen hard. (Again, inquiry serves you well here.) Remember, delegating is not abdicating your authority; it's temporarily lending your authority to others.

Delegation is a dynamic process that takes time, something impatient entrepreneurs may resist. Yet it's the combination of inquiry and empowerment that builds trust. You're sending an important signal to employees that working for you is about more than a paycheck. You want them to have an active role in the organization where they can perform at the highest level.

It pays off. Engaged employees not only increase quality, productivity, and profitability for your company, they liberate you. Instead of being a "boss" you can become a visionary leader and coach.